24/07 – Does the Greek parliament have to vote a third package of reforms?

The coverage of the Greek crisis is diverse today. Rumour has it that some eurozone countries want a third package of reforms to be approved before discussing a third bailout. The mid-August deadline is being discussed too, along with the IMF’s role amid the arrival of the troika in the country.

After the second vote in the Greek parliament, some media (including MDR and Naftemporiki) reports that Brussels, the ECB and IMF are satisfied with the Greek Parliament’s approval. Commissioner Moscovici also stated “we are on the right track.” As Brussels highlights, the approval is a very significant development.

After this second vote, Naftemporiki and Imerisia report that several euro area countries are asking Greece for a third set of prior actions in order to give their approval to the third Greek bailout programme, despite the assurance of Commissioner Moscovici that the Hellenic Parliament will not have to pass a third draft law with fiscal and structural measures. In comments on the Greek vote, EU Ambassador to the US David O’Sullivan tells NPR that “in a slightly messy decision-making process, we came to a solid conclusion and a path for Greece and its relationship with the eurozone.” He adds that “we are now seeing a very solid recovery in all of Europe.”

German media believe nothing has changed after the second vote. Nikolas Busse comments in FAZ that the Greek government still has no majority in the parliament and Alexis Tsipras has not yet implemented reforms. Regardless, the European Commission considers the situation “satisfying overall.” The EU’s attempt to “force the Greeks to do what is good for them” is an experiment with an uncertain outcome, Nikolas Busse concludes. A journalist in Tagesspiegel notes that Alexis Tsipras still faces a “stony path.” He had to make concessions to Brussels which are opposed to his pre-election promises. The author concludes that Greece remains vulnerable.

In Greece, media stress that the government wants to close an agreement with the institutions for the new memorandum and the new loan before 15 August. The FT‘s Peter Spiegel writes that Greece would be wise to reach a bailout deal with its creditors by the major ECB bond repayment deadline of 20 August. In Tagesspiegel, the authors remain doubtful about whether an agreement can be found until 20 August. With the mid-August deadline and rumours of a third Greek vote, Imerisia speaks of a new “Calvary” for the Greek government.

Imerisia quotes sources saying that officials of the EC and the ECB consider that Athens will not manage to fulfil the negotiations with the Troika by 12 August and a new bridge-loan will be needed for the coverage of Athens’ financing needs and in this case, the Greek government will have to legislate a third set of prior actions. Imerisia also reports that the heads and the technical staff of the Troika return today to Athens, with the exception of the IMF.

The Guardian reports that the move represents a personal defeat for Alexis Tsipras, who had pledged never to allow the auditors to set foot in the country again. In this context, IMF spokesperson Gerry Rice stated that the IMF’s participation in a Greek programme will depend on the outcome of the talks for the reforms and the debt. Kathimerini reports that the IMF has called on the Greek government to clarify the exact manner of its participation to the new Eurogroup programme and its overall role in Greece. The government is expected to send this letter today.

Mr Rice also reiterated the IMF’s position that the Europeans will have to implement a relief to the Greek debt. In a commentary in L’Espresso, Massimo Riva agrees with the IMF that Greece will “never be able to repay its creditors in full”. Wolfgang Schäuble’s statements to the contrary show that Europe is “imprisoned” by “obtuse” rules, and is “proof” that the current rules must be changed. On the contrary, Silke Wettach writes in Wirtschaftswoche that the IMF´s demands for a debt cut are largely to protect its own interests. The IMF’s partners are growing annoyed at the leniency with which the IMF has treated Greece so far, and they will ultimately decide whether or not Ms Lagarde is re-elected in 2016.